If a Good Has Zero External Costs, Then

question 30

Multiple Choice

If a good has zero external costs, then

• A) marginal social cost is less than marginal private cost.
• B) marginal social cost equals marginal private cost.
• C) marginal social cost is greater than marginal private cost.
• D) We need more information to determine the relationship between private and social costs.

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within the operating cycle.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of a business, whichever is longer.

Current Ratio

A financial metric that compares a company's current assets to its current liabilities, indicating liquidity levels.

Equity (Leverage)

The amount of funds contributed by owners (shareholders) plus the retained earnings (or losses). It can also refer to the use of debt to acquire additional assets.